NAB today announced a 50-basis point cut to its five-year fixed rate for owner-occupiers paying principal and interest on a Choice package.
ANZ joined the party by cutting three- and five-year fixed rates by 40 basis points on its investor interest-only Breakfree packages.
Last Friday, Australia’s biggest bank, CBA, cut its two-year fixed interest-only investor rate from 4.84 to 4.34 per cent– a drop of 50 basis points.
Westpac also joined the movement, cutting the same loan by 14 basis points, while smaller lenders such as ING, St George, Aussie Home Loans, Mortgage House and Virgin Money have also reduced some interest-only home loans over the last month.
“The fixed-rate war shows our big banks are not pricing in a rate hike anytime soon,” she said.
“The series of cuts show competition has returned to the investor interest-only space. After reaching their caps imposed by APRA, the big banks are opening up their books again.
“This is good news for people in the market who are looking for the financial security fixed rates can bring.
“Five years without having to worry about a rate hike is the kind of peace of mind a lot of home hunters are looking for,” said Ms Tindall.